Sponsored Links
Thursday in Asia, the New Zealand dollar tumbled against its major counterparts as the Reserve Bank of New Zealand kept its interest rates unchanged at a record low of 2.5% and said it will wait until the second half of 2010 before raising interest rates. A slump in equities also aggravated the weakness in the NZ dollar.
"In contrast to market pricing, we see no urgency to begin withdrawing monetary policy stimulus, and we expect to keep the OCR at the current level until the second half of 2010," Bollard said in a statement. Although the outcome was widely expected, the market had nearly priced a hike in January, and failure to do so sent the kiwi slumping against other currencies.
The kiwi plunged to a new multi-month low against the Aussie and new multi-week lows against the greenback, yen and the euro.
Bollard also gave no indication of concern about rising inflation, saying "Annual CIP inflation is expected to continue to track comfortably within the target range over the medium term."
The central bank had slashed rates by a total 575 basis points between July last year and June this year. The economy has marked the first expansion after 15 months of contraction and expanded by 0.1 percent for the three months through June 2009, mainly due to low interest rates, and fiscal stimulus plans that included tax cutting and government spending.
Recent statements from Bollard said interest rates would remain "at or below" current levels until late next year.
Bollard's statement took note of improving economic conditions overseas. "Activity in New Zealand's trading partners continued to rebound during the September quarter and financial market sentiment has improved further," he said.
The Statistics NZ reported today that the value of New Zealand's merchandise exports and imports both dropped sharply in August compared to one year ago. The report further said that exports were down 23.2 percent, or NZ$830 million compared to August 2008.
In early Asian trading on Monday, the New Zealand dollar tumbled to its weakest point since October 05, 2009 against the US dollar. The kiwi touched 0.7166 against the greenback by about 8:20 pm Eastern Time. The pair that closed yesterday's deals at 0.7214 is now trading at 0.7185. On the downside, the New Zealand currency may likely target the 0.708 level against the buck.
Since early March, the New Zealand dollar had been in an upward channel against the dollar, but its movement halted and the kiwi fell on 21st of this month after the Reserve Bank Governor Alan Bollard said that high value of the New Zealand dollar is not necessarily an impediment to raising the Official Cash Rate. Thus the kiwi dropped around 6% after hitting a new multi-month high of 0.7639 on October 21.
At 8:30 am ET today, all eyes will be on the U.S. advance third quarter GDP report. The report is likely to show that the U.S. economy contracted at a 3.2% rate in the quarter.
At the same time, the Labor Department is due to release its customary weekly jobless claims report for the week ended October 24th at 8:30 AM ET. Economists expect claims to have declined to 525,000 in the recent reporting week.
During Thursday's early Asian trading, the New Zealand kiwi dropped to more than a 3-week low of 64.82 against the Japanese yen. This may be compared to Wednesday's New York session closing value of 65.48. If the kiwi slides further, 63.12 is seen as the next target level.
The Ministry of Economy, Trade and Industry said today that industrial output in Japan was up 1.4 percent on month in September, posting an index score of 85.1.The reading marked the seventh straight month of gain and also came in above expectations for a 1.0 percent increase following the 1.6 gain in August.
Against its European counterpart, the New Zealand currency declined to a new multi-week low during today's Asian session. At about 8:20 pm Eastern Time, the NZ dollar touched 2.0519 against the single currency, down from Wednesday's closing value of 2.0405. The next downside target level for the New Zealand currency is seen at 2.079 level.
Since October 21, the kiwi has depreciated around 4% against the common currency.
In the upcoming session, the German October unemployment change, Italian hourly wages and the Eurozone business climate indicator reports are expected.
The New Zealand dollar edged down against its Australian counterpart during Thursday's early Asian trading. At about 9:35 pm Eastern Time, the NZ dollar plunged to a more than 2 1/2 -month low of 1.2531 against the Aussie. If the kiwi ticks down further, 1.259 is seen as the next likely target level. At yesterday's North American session close, the Aussie-kiwi pair was quoted at 1.2453.
The kiwi has been falling sharply against the Aussie since October 06, when the Australian central bank unexpectedly raised its interest rate from a 49-year low and said that further hike may be expected as the economy is showing signs of improvement. The kiwi has so far dropped around 4 %.
In another sign that Australia's economy is warming up, the Conference Board reported today that it's leading economic index for the country increased 1.8 percent in August.
The Conference Board also said it upwardly revised the index for recent months, as new data became available.
0 komentar:
Post a Comment